Simple Forex Strategy For Beginners

Written by Savroz FX

Simple forex strategy for beginners primarily used to buys dips in bullish markets while selling rallies in bearish markets. It's a universal trading strategy that works on every time frame and currency pair. Let's have a closer look how it works.

The Purpose of This Strategy

Buying dips in up trending markets.

Selling rallies in down trending markets.

How it works?

The strategy consists of two moving averages. A buy zone is created when the short term moving average crosses the long term moving average from below. On contrary, a sell zone is created when the short term moving average crosses the long term moving average from above. See picture below.

The buy zone will be used to trade long signals and the sell zone to trade sell signals.

In the above example, a sell zone was created by the two moving average system – the 5EMA has crossed the 200 SMA from above thus creating a sell zone.

In this case, we will be looking for sell trades only. As you can see, the Laquerre indicator crosses back from above 0.75 back below and we immediately sell the EUR/USD at 1.3127 (at the open of the new candlestick).

We place our stop loss above the most recent resistance level at 1.3191. Total risk (pips): 64

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Risk Disclosure: Trading forex on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.